Worldwide IT spending is expected to total $5.61 trillion in 2025, an increase of 9.8 per cent from 2024, Gartner says in its latest forecast. Alongside, IT spending in India is anticipated to increase by 11.1 per cent, reaching $161 billion during the year.
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories reflect higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”
According to Gartner, segments including data centre systems, devices and software will see double-digit growth in 2025, largely due to generative AI (GenAI) hardware upgrades. However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.
“GenAI is sliding toward the trough of disillusionment which reflects CIOs declining expectations for GenAI, but not their spending on this technology. For instance, the new AI-ready PCs do not yet have ‘must-have’ applications that utilize the hardware. While both consumers and enterprises will purchase AI-enabled PC, tablets, and mobile phones, those purchases will not be overly influenced by the GenAI functionality,” said Lovelock.
AI-optimised servers
Spending on AI-optimised servers easily double spending on traditional servers in 2025, reaching $202 billion.
IT services companies and hyperscalers account for over 70 per cent of spending in 2025. By 2028, hyperscalers will operate $1 trillion worth of AI-optimized servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market, he observed.
In India, spending on data centre systems is expected to increase 19.1 per cent in 2025, nearly doubling its growth rate from 2024.
Naveen Mishra, VP Analyst at Gartner shared, “Enterprises are investing in AI-ready infrastructure for targeted use cases. The emphasis on accelerated servers for AI workloads is a significant driver, resulting in increased end-user spending in this segment in 2025 compared to the previous year.”
Software and IT services are major drivers of IT spending growth in India, increasing 16.9% and 11.2% in 2025, respectively. “While software spending is propelled by the price premium of GenAI-enabled solutions, IT services spending is fueled by enterprises’ need for cloudification, digitization, and consulting services,” said Mishra.
